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Standard Life plans to convert bundled assets in November

Standard Life head of platform propositions David Tiller

Standard Life plans to undertake an “unprecedented” bulk conversion of all investments in bundled share classes on its platform to their unbundled clean equivalent in November.

In April, the FCA confirmed all legacy payments on past business between fund managers and platforms will be banned by April 2016. This means all platforms will be required to move to a clean share class model by this date.

In March, HMRC announced that platform rebates would be subject to tax, forcing both Standard and Skandia to consider changes to their business models. Standard announced in May that it had agreed to pay all its customers’ platform rebate tax liabilities for 2013 after admitting it was surprised by HMRC’s decision to tax platform rebates.

Standard Life head of platform propositions David Tiller says the provider will convert all investments to clean share classes in November after HMRC refused to allow it to continue paying the income tax liability on behalf of clients beyond 2013.

He says: “We have decided to do a bulk conversion of all the funds on our platform. That is no little task and an unprecedented piece of work.

“We have agreed to pay the tax on rebates on behalf of our customers for this year and we agreed that with HMRC.

“We were not able to agree that beyond this year, so if we continue with rebates beyond this year they are going to be taxed. Clearly that is detrimental to customers, so by doing a big conversion we are able to avoid that tax bill for customers.”

The Platforum head of platforms relations Freddie Findlater says: “This is a huge undertaking and will require robust process and systems. If they get it wrong Standard Life could come in for some criticism.”

Separately, the Standard Life recorded a 28 per cent increase in UK pre-tax profit in the first half of 2013, from £126m last year to £161m this year.


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